Do you passively invest in assault weapons?

If you own an index fund, you may profit from the gun industry. Here’s why you shouldn’t. As they were grieving the tragic loss of life in the Parkland shooting, Florida teachers learned that they had been financially supporting the firearms industry through their state pensions. According to Bloomberg, at the end of last year the Florida Retirement System Pension Plan held 41,129 shares of American Outdoor Brands (formerly Smith & Wesson Holding Corporation), the manufacturer of the semiautomatic AR-15 assault rifle used in the February 14 attack at Marjory Stoneman Douglas High School. According to the report, the pension plan also invested in Sturm & Ruger, Vista Outdoor, and Olin, other major firearms and ammunition makers. In a statement attempting to explain why it owned the stock of an assault weapons maker, a representative of the Florida State Board of Administration (SBA), which manages the teacher pension fund, said that–as fiduciaries–the group “must act solely in the interest of the participants and beneficiaries.” The spokesperson implied that since they engage in indexing, or passive investing, the SBA must own all of the companies listed in a particular index, including American Outdoor. There are a couple of problems with that statement.